Bitcoin[1] has hit new all-time highs quite a few times in the last week. At the time of writing, bitcoin has struck a high of $34,830. Clearly, bitcoin is in a bull run, especially with Coinbase[2] striking, what could be, potential OTC deals pushing BTC out of exchanges.
With more BTC being bought up by hungry institutions or high-net-worth individuals, the scenario for bitcoin is getting more bullish by the second. While the retail FOMO plays a part in this rally, I think it’s time to take a step back and look at what’s happening in the market.
The Bigger Picture
Phase 1
Let’s start in August 2020, the day Michael Saylor announced that MicroStrategy was looking to buy bitcoin as an alternative investment. Two months later, Fidelity pushed out research [3]titled “Bitcoin Investment Thesis: Bitcoin’s role as an alternative investment”.
In hindsight, these two events among others are what sparked the bull run that we see today.
Let’s look at what has happened since August.
- MicroStrategy[4] invested ~half of $1 billion in cash reserves in Bitcoin without moving the price of BTC.
- Since this was the first major investment by a traditional finance company in bitcoin, it was paraded all over the news for bringing more credibility to bitcoin among retail.
- CashApp[5] and many companies invest in bitcoin to prevent their cash reserves from debasing due to inflation by the Fed.
Even with billions of dollars moving into bitcoin, the price seemed to stay put as it hovered around the previous all-time high. After two failed attempts, the price went above the 2017-high at $19,666.
Phase 2
- Michael Saylor invested the other half of $1 billion in bitcoin despite what the critics had to
